Smart Financial Habits to Start the New Year: Virginia Families’ 2026 Checklist

While many people make New Year’s resolutions such as exercising more and eating better, a new year financial checklist can be just as important and one you should definitely stick with. Family budgeting in Virginia isn’t just about making sure you’re saving enough and setting something aside for your future needs. Many parents hope to pass something on to their offspring with an inheritance, yet not keeping a budget can make that more difficult to accomplish, while also missing out on a chance to teach their children about financial responsibility.

Why Start Fresh Financial Habits in 2026?

It’s estimated that at least 75% of Americans have a monthly budget, yet only about 25% of them actually stick with it. Why not start the new year by setting aside old habits and learning some new ones? It could get you on the right path and help you develop the skills you need to build financial resiliency and make the most of what you earn.

Set Clear Goals for the New Year

All goals should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Many people say they would like to save more money or set something aside for retirement, but something that vague really doesn’t give you something to aim for. It also doesn’t let you measure your progress. Drafting a list of clearly defined goals, how you’ll achieve them, and reviewing them throughout the year (along with your budget) makes it far more likely that you’ll accomplish them.

Review Your 2025 Money Wins & Lessons

It’s hard to chart a course for the future without looking into the rearview mirror. Take a close look at your income, expenses, and any debts you incurred or reduced over the past year. If you started the year with a budget, did you review it from time to time to see how you were doing? Did you meet your goals? If not, what obstacles got in your way? See what you can learn from the past year, in terms of your finances and your personal habits. Use this information to figure out how you can increase your odds of following through on your goals this year.

6 Smart Money Habits for Virginia Families

Good Virginia family financial habits can take time to develop so don’t feel like you have to adopt these personal finance tips for 2026 overnight, although the sooner you get started the better off you’ll be in the long run.

Create or Refresh Your Budget

If you’ve never created a budget before, or you haven’t reviewed yours in a while, start by making a list of all your household income. For many people, this starts with their wages or salary. Even if your income fluctuates or is seasonal in nature, try to get a firm monthly total that you can reasonably expect to make over the year. Also include any other sources of income, such as any side hustles or second jobs.

You can then make a list of all your regular monthly expenses. Taking a close look at your checking account and credit card statements can help jog your memory so you don’t leave anything out. A general rule of thumb for household budgeting is known as the 50/20/30 rule, where you allocate your after-tax income into three general categories:

• 50% on your household needs such as housing (rent or a mortgage), utilities, clothes, and groceries. This may also include any regular financial support that you provide to your family, such as help with living or education costs.
• 30% on wants, which refer to things you like to have but don’t exactly need. This could include nonessential or expensive food items, food delivery, streaming services, gym memberships, etc.
• 20% on savings and debt. Savings doesn’t just mean whatever you may have in your savings account; it could also involve setting something aside for a future goal, such as saving up for a major purchase, retirement funds, or an education fund. Your debt payments may include a mortgage, loans, and credit cards.

Once you have these figures nailed down, you can subtract your monthly expenses from your monthly income to give you a bottom line of where you stand. If you routinely have a surplus at the end of each month, consider how to best use that money such as reducing debts or saving for retirement and other goals. If your monthly figures show you falling behind or just breaking even, consider ways to reduce your spending or increase your income to balance your budget and give you some breathing room.

Build (or Boost) Your Emergency Fund

Financial and budgeting experts recommend having three to six months’ worth of household living expenses as an emergency fund, kept in a safe location that you could access at any time. Most people keep their emergency funds in a savings account so they can also earn interest. Some keep their emergency funds in a savings account specifically designated for this purpose, to reduce the temptation of spending the money.

Now that you have your monthly budget figures in mind, you can figure out how much of an emergency fund you need in case of an unexpected expense or loss of income. For smaller families or those with a reliable income, six months could be enough in their emergency fund. Those with seasonal incomes, or who are the primary breadwinners with several dependents, may need more than six months’ worth of emergency savings to get by. This is one of the reasons why doing a detailed review of your finances is so important, so you can better prepare yourself for the unexpected.

A Federal Reserve survey last year revealed that 63% of adults said they could cover an unexpected $400 expense by using cash, savings, or a credit card that they could pay off in full when the statement arrived. Among those who couldn’t cover such an expense this way, 24% said they would cover the expense some other way, with the most frequent option being using a credit card and carrying a balance. The remaining 13% of adults said they would be unable to cover such an expense.

Clean Up and Track Your Credit Score

Your credit score has a direct impact on your ability to qualify for loans and the interest rate you’ll have to pay. It can even impact your ability to get a job. Fortunately, you can get a free credit report by visiting AnnualCreditReport.com. This service used to be available once per year, but you can now check your credit every week.

Checking your credit regularly not only lets you see how you’re doing, it also gives you a chance to spot any risks to your credit, such as identity theft. When you check your credit, take a close look at each report. If you see any inaccuracies or signs of fraud, such as accounts or debts that you don’t recognize, contact whichever bureau is reporting the information: Equifax, Experian, and TransUnion.

The three most important factors in determining your credit score are:

• Your payment history (paying your bills on time): 35%.
• Credit utilization (your total amount of available credit versus how much you’re actually using): 30%.
• Your length of credit history (how long you’ve had each account): 15%.

Paying all your bills on time is crucial to maintaining a good credit rating. Your credit utilization does not include installment loans that you’re making regular payments on, such as mortgages and auto loans. It refers to things like credit cards and personal lines of credit. If you’re frequently maxing out or approaching the upper limits on your credit cards, that’s going to be a significant drag on your credit rating.

Your length of credit history includes all your active accounts, including any credit cards that you don’t use very much. Credit card companies will cancel the card after a period of inactivity, which could be anywhere from six months to two years. Even if you have a card that you don’t really use, it’s a good idea to keep it active because doing so can help your credit card in two ways. It’s a source of available credit, so having it available reduces your credit utilization ratio. It also helps with your length of credit history.

Applying for new credit can temporarily reduce your credit score, so if you plan on applying for any loans in the near future, you may want to hold off on any credit card or other applications in the meantime.

Plan for Big Expenses (College, Home, Travel)

It can take a long time to save up for college, so if there are any tuition bills in your family’s future, the sooner you start saving, the easier it’ll be when the time comes. Starting early not only gives you a chance to set more aside, you can also benefit from compound interest as your funds grow over time.

If you’re saving up for a down payment on a mortgage, take a close look at your home loan options in the Shenandoah Valley and consider a federally backed affordable housing program to see if you might be eligible. Of course, you can also check out real estate listings online to get an idea of what your buying costs could be.

Figuring out how to achieve these goals is a key reason why developing new financial habits and monthly budgeting are so important.

Talk to Your Kids About Money

For most kids, parents are their biggest influence and source of knowledge about money and budgeting—and whatever positive habits and money handling skills they learn at a young age can help set them up for success when they get older. Start teaching your kids about money as soon as possible.

Make sure they understand where money comes from, the hard work involved in earning a living, and the importance of spending (and saving) responsibly. If you’re saving up for a family vacation, let your kids know that this kind of expense takes planning and sacrifices. You might set up a chart and keep them informed on your progress as you explain how to reach your financial goal.

Even everyday purchases can be a teachable moment. At the grocery store, you could explain why you choose certain items and how the more you save today, the sooner you’ll have enough money to meet that vacation goal. If you have a major expense, such as a car repair, give them an idea of how much time you spend working to be able to afford this. Make sure they also understand that debt, such as carrying a balance on your credit card, reduces how much you can spend on other things, while saving and having something in the bank makes life easier for all of you.

Automate Savings & Bills

Many customers have part of each paycheck split between their checking and savings accounts, or they place their income into a checking account and have a specific amount automatically transferred into a savings account on a weekly or monthly basis. Many people discover that this makes it easier for them to save money and reduces the temptation to spend what they might’ve contributed to their savings goals. You could also have the transfer split between more than one savings account, such as an emergency fund, college fund, and your regular savings account. Automating your bill payments can help you pay your bills on time, which can help your credit score, as long as you always have enough in your checking account to cover your bills when they post to your account.

Tools and Resources to Keep You on Track

At F&M Bank, we offer personal banking resources such as checking accounts, credit cards, personal loans, savings accounts, and CDs. We also provide digital banking tools that make it easy for you to manage your funds, pay your bills, and transfer money through our online portal and mobile banking app.

Visit Us to Get Started

If you have any questions on New Year’s financial habits, personal banking, and how to meet your financial goals, please contact us today to set up an appointment at one of our many locations in Virginia, West Virginia, and the Shenandoah Valley area. Let us help you achieve your financial goals and make your money work for you.